If you either uncheck the Show Error Message check box or set the Error Style to Information or Warning, the user can type an entry that is not on the list into a cell.

If you want to expand the source list, a dynamic name could be used. Something like
Name: sourceRange RefersTo: =Sheet1!$A$1:INDEX(Sheet1!$A:$A, COUNTA(Sheet1!$A:$A), 1)